The Fund posted a total return of 3.12% for the quarter, compared with 1.81% for the Funds benchmark, the S&P 500® Index. The change in market leadership benefited the Funds performance, aided primarily by stock selection in the consumer staples and industrials sectors. Stock selection within the information technology sector slightly detracted from performance.
Economic growth projections for the first quarter were revised downward, taking the weather disruptions into account. We believe stronger macroeconomic data on spending and manufacturing should create a favorable environment for stocks this year. In addition, its unlikely any major legislation will pass until after Novembers mid-term elections. Overall, investors remain concerned about further economic cooling in the larger emerging markets, particularly China, and the impact of higher taxes in 2014.
We believe the outlook for risk-taking will continue to improve, as better economic data are released. We believe the Fund is well positioned as investors move beyond the broad economic data and refocus their attention on company fundamentals.
If you're seeking a low cost, disciplined approach to investing in equities, this fund may be appropriate for you. It seeks long term growth of capital and dividend income and invests primarily in a broadly diversified portfolio of established, large-cap companies. The Fund is intended for use as a core equity investment.
- Use a multi-factor proprietary quantitative stock selection model with the goal of providing additional total return versus the S&P 500® Index.
- Create a portfolio with risk, style, capitalization and characteristics similar to the S&P 500® Index while potentially providing excess returns by overweighting or underweighting stocks that have the potential to achieve the Fund's objective.
- Sell securities when they are no longer attractive based upon evaluation criteria, such as valuation, price momentum and earnings quality.